Wall Street Wades In: Stablecoins Bask Their Institutional Moment

July 27, 2025

Stablecoins achieve more institutional validation as the world's largest asset managers enter the market.

Traditional financial firms are now moving beyond cautious observation toward direct market participation, as stablecoins undergo a fundamental maturation. Let’s see what they’re up to!

Key Highlights

• Charles Schwab Eyes Stablecoin Market Entry: The $10.7 trillion asset management giant Charles Schwab announced plans to launch spot Bitcoin and Ether trading while exploring stablecoin market entry. This would make Charles Schwab the largest traditional financial institution to signal direct stablecoin involvement and potentially reshape competitive dynamics across the entire sector.

• WisdomTree Launches USDW, Targeting $3.7T Market: WisdomTree officially launched its USDW stablecoin as the market targets $3.7 trillion growth by 2030. This provides institutional-grade infrastructure and positions it for massive sector expansion over the next decade.

• Shanghai Court Exposes $6.5B Illicit Stablecoin Network: Chinese authorities revealed a $6.5 billion illicit stablecoin operation alongside a separate $905 million forex case, highlighting the intensity of regulatory enforcement and the scale of underground digital asset activity requiring oversight.

Institutional Adoption Accelerates

Traditional financial institutions are rapidly transitioning from cautious observation to direct market participation. Charles Schwab's $10.7 trillion asset base entering stablecoin consideration represents the most significant institutional commitment to date, dwarfing previous announcements and potentially triggering widespread industry adoption. WisdomTree's USDW launch targets the projected $3.7 trillion market expansion by 2030, demonstrating sophisticated institutional positioning for long-term growth.

However, institutional sentiment isn’t in lock step. Bank of America's CEO expressed cautious views on stablecoins during quarterly earnings, while broader banking sector opinions diverged sharply across Q2 earnings calls regarding stablecoins as the future of banking. This divergence reflects ongoing institutional uncertainty about competitive implications and regulatory compliance requirements. I observe in my own experience that for many of the largest FinTechs seeking access to stablecoins, it’s not their internal teams that put up the most roadblocks, it’s some of the largest banks behind the scenes that don’t want stablecoins involved in their settlement flow. 

Western Union's exploration of stablecoin integration into digital wallet offerings signals a new era in cross border infrastructure and is an obvious evolution of the remittance giant’s tech stack. This builds on growing recognition that stablecoins could capture significant market share from established payment processors.

Regional Innovation and Compliance

Global stablecoin development increasingly reflects regional strategic priorities and compliance requirements. Rain achieved PCI DSS compliance (card security certification), reinforcing its commitment to secure infrastructure standards that institutional adopters demand. Meanwhile, Korea's stablecoin ecosystem is experiencing significant momentum, with Kaia linking Tether, KakaoPay, and LINE NEXT for comprehensive Web3 innovation while KOSCOM validated stablecoin-based settlement systems for capital market transformation.

African markets demonstrate complex dynamics between de-dollarization efforts and on-the-ground demand for dollar-denominated assets, with stablecoin adoption emerging as a pragmatic solution for regional populations. The Korea Institute of Finance anticipates dollar strengthening as U.S. stablecoin regulation provides clarity, while Conflux launched yuan-pegged stablecoins specifically for Belt and Road payment integration.

Hong Kong's central bank chief warned against stablecoin hype amid surging interest, indicating regulatory concern about speculative excess despite the territory's supportive licensing framework. 

Market Growth and Platform Integration

Some quick adoption metrics. MiniPay surpassed 8 million wallets and 200 million transactions with a 255% activation surge in Q2, illustrating how stablecoins fundamentally transform fintech infrastructure. Polygon stablecoin supply reached three-year highs while USDC on Hyperliquid doubled to $4.9 billion as decentralized exchange derivatives trading gained substantial ground.

Platform integration continues expanding through strategic partnerships. Tastytrade and ZeroHash introduced instant stablecoin account funding for global traders, while Polymarket is evaluating launching proprietary stablecoins to bolster ecosystem development amid U.S. regulatory clarity following its 2022 acquisition.

Technical Innovation and Product Development

Yield-bearing stablecoin innovations continue attracting significant capital and user adoption. Ethena's sUSDe stablecoin APY surpassed 10% amid DeFi expansion, demonstrating sustained demand for yield-generating dollar alternatives (everybody wants yield). The Ethena Foundation plans to spin up a SPAC called StablecoinX dedicated to purchasing millions of ENA tokens. These types of sophisticated capital deployment strategies will likely become more popular as stablecoins need to differentiate themselves in an increasingly crowded market.

Let’s talk about multi-chain expansion. Polkadot announced plans for DOT-collateralized stablecoin launches (this is my first time seeing a Polkadot headline in a while, they’ve been pretty far behind lately), while SolvBTC minted satUSD stablecoins on BNB Chain using USD collateral for Bitcoin-backed DeFi applications. I’m extremely bullish on Bitcoin-adjacent stablecoin projects so this one is especially interesting to me. KONET filed patents for blockchain-based collateralized stablecoin operations and management technology, indicating continued technical innovation.

Noah and Gnosis announced a collaboration on U.S. stablecoin infrastructure, demonstrating institutional-grade development. 

Regulatory Enforcement and Corporate Strategy

This is a big event in Asia. Chinese enforcement activities revealed massive illicit stablecoin activity, with Shanghai courts exposing a $6.5 billion network alongside separate $905 million forex violations. These cases highlight the scale of underground digital asset activity requiring regulatory oversight and enforcement response. 

Corporate strategic positioning accelerated through subsidiary establishment and licensing applications. IVD Medical advanced U.S. strategy with new subsidiaries and stablecoin license applications, while Snail Inc. established Snail Coins LLC as a wholly owned subsidiary for stablecoin initiatives. 

And check this out, yet another publicly traded company has skyrocketing stock prices after announcements about stablecoin integrations: WEBUY stock soared following partnerships to pioneer stablecoin payment integration. For those keeping track I think this is the 3rd or 4th headline I've seen like this where a company's stock rises based on stablecoin announcements.

Regulatory preferences vary significantly across jurisdictions. JPMorgan reports that regulators outside the U.S. appear to prefer tokenized bank deposits over stablecoins, indicating divergent policy approaches that could fragment global market development. I really don’t see this happening as fast people think though, tokenized deposits are a different paradigm requiring a significant amount of additional investment for a bank; integrating to existing stablecoin networks is not only cheaper but faster as well. I see tokenized deposits and stablecoins cohabitating but until tokenized deposits get better traction, stablecoins will be the preferred path for the time being. 

Tether did some recent asset freezes, adding fuel to decentralization discussions about private versus sovereign digital currency infrastructure. A lot of people are spooked about stablecoins like Tether becoming too big, and becoming de-facto CBDC’s because the government can just subpoena private companies to freeze assets. This is always how the financial system has worked so although I’m personally opposed to a CBDC as well, I see how privately issued stablecoins like Tether and others can be compelled to operate similarly to a CBDC. At least the separation between government oversight and private company operations is stronger than a CBDC alternative. We’ll see how this plays out. 

Thanks for reading this weeks newsletter! Stay tuned for next week's issue as we continue tracking this rapidly evolving landscape. There’s going to be some massive news dropping next week, you won’t want to miss it.

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